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About Threadless new compensation - with numbers

When I first heard about the new compensation, I have really negative feeling towards the whole situation. From the current mood in the forum it seems the community (esp the designers) has been really supportive with the move, which is a good thing. After what happened in January, I believe this is the way to go.


The reason for my negativity is mainly about the future compensation as compared to the current one.


The current compensation is either $2000+3% royalty or 10% royalty from sale. There are other kind of compensation, but these two are the most often offered to the designers.


The new compensation will be 20% of net PROFIT.


Case 1: compared to current 10% royalty from sale
In order for this new compensation be considered better than 10% royalty, the profit must be equal or greater than 50% of the selling price of product.


Example: Selling price for product is $20 and the cost is $10. This accounts to $10 net profit.
10% from sale means 10% from $20 = $2
20% from profit means 20% from $10 = $2
Great! both system are equal


Example 2: Everything on sale. Selling price for product is now $13 and the cost is off course still $10. This accounts to $3 net profit
10% from sale means 10% from $13 = $1.3
20% from profit means 20% from $3 = $0.6
In this case the old system is more rewarding.




Case 2: compared to current $2000+3% royalty from sale
In order for this new compensation be considered better than $2000+3% royalty from sale, a design must sell around 1000-1500 pieces (assuming the occasional sale and $10 cost of production & marketing & electricity & salary).
Consider the design that was released last Monday: https://www.threadless.com/product/5717/SOUR_PUSS/tab,guys/style,shirt
There are 423 t-shirt as of now in stock. Let's assume for the first release, 500 t-shirts were made. This means the design needs to be reprinted 2-3 times before meeting the $2000 compensation. I believe in average your design need to be really popular before getting 2-3 reprints. This second and third reprints may also span over a year or two.



Now the twist is there will be weekly cash prize! No number has been revealed yet. I am guessing it will be less than $10,000 but more than $2,000. Less than $10,000 because $10,000 is what Threadless paying per week currently (5 new designs, 5 x $2,000 = $10,000). There's no point of changing the system if the payout is the same. More than $2,000 because now Threadless is saving a lot. Also because Threadless starts from $2,000; it needs to be something more alluring. My guess is $5,000 for one winner per week.




UPDATE: There is no twist. There will be no upfront payment or cash incentive for designs that won regular challenge.



What I am worried about from all this:
1. Threadless will no longer be printing 500 items for first run. Now Threadless doesn't pay $2000 upfront anymore, there's no need to recover the $2000 design cost.
2. Threadless will print more unpopular, non-selling designs
3. On the other extreme, Threadless will turn into Teefury
4. More voting abuse
5. People moving away



List of good things that will certainly happen:
1. Rights returned to designers. This is the best thing that happened at Threadless.
2. Much much more payout as compared to $2000 to some really popular designs. It will be A LOT more.
3. You can sell on other websites.
4. In the long run this system is better, but only if your design can survive the long run.



List of things that I wish will happen:
1. Individual store page per designer, just like Society6
2. Threadless choosing more designs.
3. (Reserved for later)
4. (Reserved for later)

Watch this
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fightstacy
fightstacy profile pic Alumni

I thought the old 3% - 10% was profits already..

radiomode
radiomode profile pic Alumni
1 design submitted -

it was from net sales

melmike
melmike profile pic Alumni

I think you're making a lot of assumptions Budi. I agree that your approach is necessary to get to the bottom of any financial pros or cons, but let's wait until April to see what the new cash incentives will actually be before getting worried.

Also, I too thought that the current royalties system was profit based.

mike bautista
mike bautista profile pic Alumni

Threadless will print more unpopular, non-selling designs

what's that doing on the worried list?

melmike
melmike profile pic Alumni
mike bautista said:

Threadless will print more unpopular, non-selling designs

what's that doing on the worried list?

Yeah, this doesn't worry me. In fact, it encourages me.

Am I right in assuming that what you're saying here is that the changes might cause the quality of the art that gets printed to slip? If it is, I really can't see that happening. Given the amount of incredible art submitted to this site daily, I suspect they could start printing 20 designs a week without diluting the quality of the range one iota.

mike bautista
mike bautista profile pic Alumni

I think another way to word it is "riskier designs". I don't see threadless' curating abilities to just drop for no reason. and if the new changes does allow them to take risks like how they used to, then I'm all for it. more cool shirts.

[+duracell-]

So basically, this sounds like the prints that suck won't get shit. I can live with that.

radiomode
radiomode profile pic Alumni
1 design submitted -
[+duracell-] said:

So basically, this sounds like the prints that suck won't get shit. I can live with that.

This wins best comment so far

melmike
melmike profile pic Alumni
radiomode said:
[+duracell-] said:

So basically, this sounds like the prints that suck won't get shit. I can live with that.

This wins best comment so far

haha, yep.

Jake Friedman
1 design submitted -

That is a good point about sales potentially cutting artist profits, but it seems that this system will really favor those designs that get reprinted every other month. So its a bit of give and take.

Haasbroek
Haasbroek profile pic Alumni
1 design submitted -

Also, no worries: cash prizes are staying put! We know you love them, and so do we. We’ll be giving cash out for weekly winners as well as for design challenge winners.

I think this means it will stay the same in terms of cash prizes.

waynem
waynem profile pic Alumni

I can understand your concerns here but it does seem like the new system will better reward artists with the most successful designs, and if it opens the door to more work being given a chance that's even better. I'm wondering though if the 90 day waiting period after submission is going to change though now that designs aren't going to be exclusive. Will we be able to start putting our work online elsewhere any sooner?

mohacsy
mohacsy profile pic Alumni

I love this post Budi, it encourages objective thinking:)

What the changes embrace more appropriately is the aspirational nature of the Threadless artist. (people in general)

I don't think poor or normal selling shirts will make as much money as in the past but if something goes viral you will be more proportionately rewarded for your success.

Obviously Threadless have revealed some great new changes, but it's really interesting hearing such a well credentialed artist give a balanced perspective.

(it may be a little preemptive, but so is the news, so that seems fair at this point)

I think what threadless have realized is that when Artists benefit from sales they drive traffic to the site in order to get sales.

With social media etc artists have become a lot more powerful than they used to be, not to mention an artists fans who in this blogger culture are often much more powerful than the artists themselves.

We used to rely on threadless to get sales where now i think it is a much more symbiotic relationship:)

JaymeArt
  1. On the other extreme, Threadless will turn into Teefury ~ radiomode

Noooooooooooooooooooooooooooooooooooooooooooo!

Musarter
Musarter profile pic Alumni

I think your concerns are legitimate. My first thought about doing away with the usual $2000 prize was negative too. It sounded like Threadless was switching to contest only prize money system. On reading further clarification it has become apparent that this is not the case.

I also thought the 20% thing sounded good in theory but requires tons of sales to equal the $2000 payment. I was not sure why so many people jumped on the idea that the 20% is better for the artists. Like you said, a design would have to be reprinted multiple times to get the sales up to the $2000 mark. Yes, the potential for more money is there but I don't think 80% of designs will get there based on the sheer volume that would need to be sold. How many designs get reprinted more that 3 times? I would lager the number is less than 20%.

I think the change is a shrewd business move on Threadless' part. I just hope the site does not just become about contests and move closer to being like Teefury.

randyotter3000
randyotter3000 profile pic Alumni
6 designs submitted - Score now!

A rough judgement on how well my catalog of designs have sold would suggest 3 maybe 4 designs max would ever make more than the 2k prize if printed today.

The Paper Crane
The Paper Crane profile pic Alumni
1 design submitted -

This is all speculation really until we find out exactly how many regular prizes there are going to be and how much will be paid.

According to this post from another thread, there won't be much difference:

LauraCat said:

Hey Mr. Rocks - The amount of designs that receive the weekly upfront cash is not going to be very different than the existing model in that we will 1) still have Grand Prize winners for each Design Challenge and 2) weekly/monthly cash-based incentives. The new Royalty system is, yes indeed, based on how well your design sells. Basically we want to give our artist community the use of the Threadless platform to market and sell your designs, without giving up any exclusivity. And we are also very excited to be releasing the Royalty Tracking feature soon, which should alleviate any confusion in regards to how much your design is earning each month, and what you should expect to get paid.

Musarter
Musarter profile pic Alumni
Musarter said:

I would lager the number is less than 20%.

I meant "I would wager the number..." but mmmm, Lager sounds better.

I may be jumping to conclusions with where payment is going. I tend to be a knee jerk reaction kind of guy when it comes to money and art. We will have to see what actually happens after April 1st; it is all a bit foggy right now.

Haasbroek
Haasbroek profile pic Alumni
1 design submitted -

mmm Lager..

PeculiarTiffany
PeculiarTiffany profile pic Alumni
1 design submitted -

Mmm, a glass of cold beer sounds really good right now.

lxromero
lxromero profile pic Staff
[+duracell-] said:

So basically, this sounds like the prints that suck won't get shit. I can live with that.

parallelish
parallelish profile pic Alumni

the thing I dont like is now i kinda have to promote my stuff if i want to make any money.

and i really dont like promoting, but im also not really worried about making a lot of money... sorry threadless, hopefully that doesnt discourage you from printing more of my designs in the future, but i would understand.

[+duracell-]
randyotter3000 said:

A rough judgement on how well my catalog of designs have sold would suggest 3 maybe 4 designs max would ever make more than the 2k prize if printed today.

Dang.. that's bit concerning when you consider Aaron has won designer of the year iirc.

wowrainbows
wowrainbows profile pic Alumni
[+duracell-] said:

So basically, this sounds like the prints that suck won't get shit. I can live with that.

I know you're mostly joking, but none of my prints ever sell well. So basically if this math is correct, I'll be wasting my time submitting to Threadless. We'll see, I guess.

parallelish
parallelish profile pic Alumni
wowrainbows said:
[+duracell-] said:

So basically, this sounds like the prints that suck won't get shit. I can live with that.

I know you're mostly joking, but none of my prints ever sell well. So basically if this math is correct, I'll be wasting my time submitting to Threadless. We'll see, I guess.

you can still get cash prizes for contest, the parody one is $10,000.

wowrainbows
wowrainbows profile pic Alumni

Yeah, the only contest I've ever won was the snowboard one (and they never even gave me the board!)

Not many contests have interested me. Maybe I'll have to force myself to submit to them.

wowrainbows
wowrainbows profile pic Alumni

and they never even gave me the board!

I should mention though, that Threadless offered to give me a few hundred bucks since Nightmare never followed through. I didn't accept though. I just want the darn board (which isn't even for sale).

Ryder
Ryder profile pic Alumni
1 design submitted -

i see many pros and cons... for me personally, more cons than pros, but maybe i'm just understanding it wrong.

The new system is awesome for superstars that get lots of reprints and sell quickly, but for the average designer like myself, it feels a lot like society6... where I'm like "oh cool i sold a print... oh wait I only made 65 cents..." and then i'm like "why am i submitting to S6 anyway?"

I began to worry about threadless when the whole DTG phase came into play... Threadless was always cool because it had really nicely printed shirts... and they had limited runs which made them sort of exclusive/collectible. Also, as Artists we got the flat rate of $2000. which made submitting/promoting and voting for designs worth it. There's a reason I don't submit to other shirt sites, the juice isn't worth the squeeze.

So all I'm saying is, congratulations to the artists that sell well, honestly i think these new adjustments are going to be fantastic for you!

parallelish
parallelish profile pic Alumni
wowrainbows said:

Yeah, the only contest I've ever won was the snowboard one (and they never even gave me the board!)

Not many contests have interested me. Maybe I'll have to force myself to submit to them.

A lot of contest are loosely restricted enough to do just about whatever you want, like monochromatic and art without concept. But yeah I'm not submitting anything to the parody challenge.

parallelish
parallelish profile pic Alumni
Ryder Revolution said:

i see many pros and cons... for me personally, more cons than pros, but maybe i'm just understanding it wrong.

The new system is awesome for superstars that get lots of reprints and sell quickly, but for the average designer like myself, it feels a lot like society6... where I'm like "oh cool i sold a print... oh wait I only made 65 cents..." and then i'm like "why am i submitting to S6 anyway?"

I began to worry about threadless when the whole DTG phase came into play... Threadless was always cool because it had really nicely printed shirts... and they had limited runs which made them sort of exclusive/collectible. Also, as Artists we got the flat rate of $2000. which made submitting/promoting and voting for designs worth it. There's a reason I don't submit to other shirt sites, the juice isn't worth the squeeze.

So all I'm saying is, congratulations to the artists that sell well, honestly i think these new adjustments are going to be fantastic for you!

Same here.

v_calahan
v_calahan profile pic Alumni
1 design submitted -

I thought I had sorta understood the new process… I'm lost now, I 'll grab a beer and get my few brain cells to think about it. Anyways everyone lost me at "royalties". Never received anything like that with my prints, sold out or not. The 2000$ flat and when reprinted a 500$ flat payment. How does that work, is it only for phones and art prints? And who's talking about DTG is it in the tube with the new rules? Must have missed that?

opifan64
opifan64 profile pic Alumni

I'm okay with being paid for what actually sells. That seems very fair to me, especially given the fact that the artist retains copyright. That's huge. Also, don't forget that Threadless reserves the right to licence the artwork, so there's potential for more profits if it's licensed for other products besides t-shirts. On the flip side, with the old system, if my design happened to flop and Threadless had to absorb a loss because of the $2,000 upfront payment... I don't see this as a viable payment strategy compared to simply paying a reasonable royalty.

opifan64
opifan64 profile pic Alumni

I know plenty of artist friends who make thousands of dollars every month on sites like Deny and society6 simply through royalties. I would take incremental payments with copyright retention over a lump payment any day. It does take some work and promotion to make sales, but that's the life of the artist, and ultimately it's a win-win because it helps promotes the site and also the artist.

Robo Rat
Robo Rat profile pic Alumni

I believe that this applies to those who are popular and have a well-established portfolio all over the internet. But for those who are just starting to make a name for themselves, it will take time to get compensated. Because if a buyer checks the designs, he/she will surely purchase the one from a well known designer over a not so popular one. Thats how branding works.

opifan64 said:

I know plenty of artist friends who make thousands of dollars every month on sites like Deny and society6 simply through royalties. I would take incremental payments with copyright retention over a lump payment any day. It does take some work and promotion to make sales, but that's the life of the artist, and ultimately it's a win-win because it helps promotes the site and also the artist.

Morkki
Morkki profile pic Alumni

No, they'll buy the design they like. Whoever made it.

radiomode
radiomode profile pic Alumni
1 design submitted -
randyotter3000 said:

A rough judgement on how well my catalog of designs have sold would suggest 3 maybe 4 designs max would ever make more than the 2k prize if printed today.

The way I see it now there are two aims winning at Threadless: 1. To get printed 2. To get money

When the current system works with $2000 upfront, you get printed and you get money. Guaranteed.

Now you can get printed, but there is a chance you won't get money (talking about lot of monies). This promise of lots of monies is the reason Threadless is worth competing for (as also said by RR above). If you just want to get printed, with no guarantee payment, you can just put your design on Society6 or Redbubble.

If you are the type of artists that make "experimental" design, the kind of design that may stay on shelf for a long while, this new T&C should worry you (rather than motivate you?)

opifan64 said:

I know plenty of artist friends who make thousands of dollars every month on sites like Deny and society6 simply through royalties. I would take incremental payments with copyright retention over a lump payment any day. It does take some work and promotion to make sales, but that's the life of the artist, and ultimately it's a win-win because it helps promotes the site and also the artist.

Eric, I also agree with this. Some people have set solid foot on other sites too. These people who make awesome designs that sell really well will probably make a lot at Threadless too with the new royalty system. After trying other POD sites in the past few months, I have bigger favor for royalty system. I, however, still prefer 10% of sale, rather than 20% of profit.


As I mentioned in the post, what I believe right now, the decision to move to royalty system is not something that Threadless chooses to do but rather something that Threadless needs to do.

This post is merely a help with math and reading contract. Also to set people on real expectation that what you get now will likely be smaller than the previous contract. In return to have your rights back. You guys remember the expectation vs reality that happened with Threadless Lab project?

spookylili
3 designs submitted - Score now!

so basically, if I ever get printed I won't make any money because my designs suck. got it.

Robo Rat
Robo Rat profile pic Alumni

I think since there will be no more $2000 cash upfront, Threadless can now print a lot of designs but with a lower quantity for each since if the product doesn't sell much then they will not lose that enough money compared to the last time. Just like what Teefury, Teepublic and the list goes on, is doing.

thompson98

i have not been printed yet here but with this new payment, it wont look good for me. i dont have a fanbase of people on social media to promote to, if i ever do get printed. So it does not look like i would get much money. $2000 is alot to me and i would much rather that. if i want this profit payment style, i would submit to S6. I am kind of dissapointed.

tomburns
tomburns profile pic Alumni

I know plenty of artist friends who make thousands of dollars every month on sites like Deny and society6 simply through royalties.

I would love to know the secret of how to do this!? I designed one of the best selling threadless shirts of all time, but my combined teepublic and society 6 earnings are MAYBE $30-$40 bucks a month. :(

Do your artist friends have any tips for me, besides the normal "promote on blogs, social media, blah, etc" that I have already tried and am always trying and just doesn't work?

Also, the "good designs will bring customers" doesn't hold water either. I have designs that would sell great on threadless that have gone unsold for months/years elsewhere.

I want thousands of dollars every month! how's that work?

gebe
gebe profile pic Alumni
1 design submitted -

Guys, in two days of life of this blog, has not appeared any constructive staff comment yet. Usually the staff immediately quiets most atrocious doubts. This gives me to think.

opifan64
opifan64 profile pic Alumni
tomburns said:

I know plenty of artist friends who make thousands of dollars every month on sites like Deny and society6 simply through royalties.

I would love to know the secret of how to do this!? I designed one of the best selling threadless shirts of all time, but my combined teepublic and society 6 earnings are MAYBE $30-$40 bucks a month. :(

Do your artist friends have any tips for me, besides the normal "promote on blogs, social media, blah, etc" that I have already tried and am always trying and just doesn't work?

Also, the "good designs will bring customers" doesn't hold water either. I have designs that would sell great on threadless that have gone unsold for months/years elsewhere.

I want thousands of dollars every month! how's that work?

With your skills you should be earning a hell of a lot more than that. The thing with society6 is it's not about dumping a bunch of cool designs and then walking away. It's more like a garden that you have to invest time into to grow. Wall art is a bit of a different beast than t-shirt design, and that's really where you make the best margins on society6 because you choose the mark-up. I find my Threadless t-shirt designs don't really sell that well as wall art. The main thing is to build up followers (a percentage of whom are customers) and get featured on the front page a lot. It takes time... like, years. You need to upload new art on a somewhat regular basis. The more followers you have, the more promotes you get. The more promotes you get, the more often your art is recommended to buyers and the more likely you are to make sales. The more sales you make, the higher the internal algorithms push your work on to the sales pages which increases visibility. Zero visibility = zero sales. High visibility = high sales. My first year on society6 I couldn't even make $20 a month, but sales grow incrementally and at a certain point it's a snowball effect if you're persistent but it's a tough nut to crack.

opifan64
opifan64 profile pic Alumni

Also, every site has it's "thing"... the kind of art that resonates with the buyers on that particular site. Go to the sales pages and filter for popularity to see what is selling well on society6. Some of those pieces have been on page one of "Popular" for ages and I guarantee those artists are making thousands every month if they have multiple designs on the popular pages (Amy Hamilton, Bianca Green, etc).

tomburns
tomburns profile pic Alumni

Yeah see, that's what I'm talking about, it's a marketing game, not a design one. I am just not interested in doing that day in day out (I have a day job, I am not full time freelance) , that's why threadless will always be better for people like me, no matter what site carries the same design, because their visibility is much higher.

tomburns
tomburns profile pic Alumni

Yeah society 6 is probably never gonna be great for me, I'm more of a tshirt art kind of dude

opifan64
opifan64 profile pic Alumni

Society6 does sell a lot of t-shirts too, so if you hit on a popular shirt, that's one way to drive more sales to your page. Any item that shows up under the popular filter will drive sales and increase your visibility overall. A very rough, purely anecdotal (possibly wildly inaccurate) formula for determining sales us that your monthly sales will be 10% of your followers, so if you have 10K followers you might make close to $1,000 a month.

opifan64
opifan64 profile pic Alumni
tomburns said:

Yeah see, that's what I'm talking about, it's a marketing game, not a design one. I am just not interested in doing that day in day out (I have a day job, I am not full time freelance) , that's why threadless will always be better for people like me, no matter what site carries the same design, because their visibility is much higher.

I understand that. I have a full time job too, nine to ten hours a day. I'm not saying you have to devote your life to it. I only post stuff on weekends. It's not about quantity, it's about quality and consistency.

opifan64
opifan64 profile pic Alumni

The Kase is pretty good too. It's a new French iPhone case company that is aggressively expanding in the retail market (brick and mortar stores). I don't do that great there but I know some people who make a thousand a month just on that site alone, and the site only went live last year.

tomburns
tomburns profile pic Alumni

Well, I have over 30,000 followers here, but I am pretty sure that is not going to translate to 3k a month,

It will be interesting when I can see what is selling here how that compares to the exact shirt design selling on teepublic. Then I will know for sure what I suspect is that other sites just plain don't get as much traffic/sales as threadless does.

As for society6, I ordered a shirt from them once to check the quality (like I always do if I use a dtg printer to sell shirts) when I had shirts posted there. The one I received washed out to almost invisible after one wash so I took any shirts off of that site and moved everything to teepublic, where the shirt and print quality is great.

I think society6 is a good place probably for wall art artists, but my stuff must not translate as well for that.

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